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Pakistan need to build self-esteem in oil and gas exploration and production

Pakistan need to build self-esteem in oil and gas exploration and production

Interview with Mohammad Ibrahim Kasumbi — former Senior Vice President Karachi Chamber of Commerce and Industry

PAGE: Kindly tell us something about yourself:

Mohammad Ibrahim Kasumbi: I am in the business of distribution and marketing of Plastics and Petrochemicals for last 30 years. I have been associated with Karachi Chamber of Commerce and Industry for over 16 years and had the honour to serve as Senior Vice President in the year 2015-16.

PAGE: How would you comment on the indigenous oil potential in Pakistan?

Mohammad Ibrahim Kasumbi: Successive governments in Pakistan have by and large neglected the true potential of oil and gas exploration and production in the country. According to various geological surveys and studies conducted by some major oil companies, Pakistan has substantial unexplored reserves of oil and gas both on-shore and off-shore. In my recent visit to Houston-Texas, United States, I had the opportunity to meet some senior consultants and experts of the Pakistani origin, who were very keen to provide their services to the Government of Pakistan and OGDC. They were of the view that there are vast reserves of Shale Gas and Oil in various blocks of Sindh and Balochistan. They met the former prime minister Shahid Khaqan Abbasi during his visit to Texas few years back when he was Minister for Petroleum and offered him their services free of cost, but the Minister at that time was only interested in LNG.

It is unfortunate for the country that those in power have only focused on their personal gains and neglected a very important sector which can help reduce our dependence on imported oil and save the precious foreign exchange.

PAGE: How could Pakistan attract foreign investment in the oil exploration sector?

Mohammad Ibrahim Kasumbi: I had a chance to meet some executives of oil companies in the US as well as in other countries. What I was told was surprising. They said that the Government of Pakistan was not willing to award concessions to them for E&P. It was too focused on import of LNG and Crude Oil at exorbitant costs due to political considerations and short term interests. They were not interested in any long term prospects for developing indigenous energy sources.

PAGE: Your views on the import of oil by Pakistan:

Mohammad Ibrahim Kasumbi: Pakistan will have to reduce dependence on imported energy sources including oil and LNG. It will have to diversify its energy mix and rapidly develop sources of cheaper energy such as coal and hydro power. Otherwise the country will continue to suffer from widening current account deficit, high cost of industrial production and chronic budget deficits. Due to high cost of energy, cost of production is higher in Pakistan as compared with regional competitors such as India and Bangladesh.

 

Many of our industries have shut down and we are relying heavily on import of consumer goods from China. Our global competitiveness has been diminishing and consequently the exports have declined over the years. This state of affairs cannot continue for long and the country will have to develop alternate sources of cheaper energy. Dams will have to be built on a war footing to produce hydro power, while also the country should award concessions to major oil companies for exploration of shale oil and gas.

PAGE: How could Pakistan reduce its imported oil consumption?

Mohammad Ibrahim Kasumbi: As I mentioned in the previous answer, we will need to have both medium and long term solutions. It will not happen overnight, but the dependence on imported oil and LNG can only be reduced through development of indigenous resources including coal, hydro and wind power. The new government will have to take initiatives immediately to award concessions for exploration while also start work on projects to generate coal based electricity.

PAGE: What is your take on energy policy of Pakistan?

Mohammad Ibrahim Kasumbi: As I said earlier, it is important to develop alternate energy sources within the country. For that the concessions should be given for exploration and production to both local and foreign companies. Work on Pakistan-Iran gas pipeline has been halted for a long time. Now Pakistan should get out of the influence of foreign powers and take decisions in best national interest. Pakistan-Iran Gas pipelines should be completed expeditiously to ensure consistent and economical supply of gas to the country. To reduce our production costs and make our exports competitive in global marketplace, we have no option but to go for coal based power projects and build dams on war footing.

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